Treasury has published its supervision report 2023-4 for AML and CFT – the 12th report in all. The report is wider-ranging than previous years, including things like metrics on guidance and training that supervisors provide for firms, and how they are targeting activity according to risk. The report comes against the backdrop of the 5th round of FATF assessments – the results of which won’t be published until 2028 but the data gathering exercise has already started.
The report notes that the Government is committed to strengthening the supervision regime, and will announce a plan for reform “as a priority”. It also plans to respond later in the year on changes to the MLRs. Also, the Government is currently working on the next ML/TF NRA and will publish it this year, to be followed by the proliferation finance NRA.
Key statistics from the information include:
- that nearly 1,000 of a total over 13,000 applications were rejected – but this does not take account of those that businesses withdrew;
- around 9% of the supervised population are considered high-risk by their supervisors – but 23% of FCA supervised firms are assessed as high risk and only 5% as low risk
- in the 2023-4 reporting period, the FCA received 275 applications for AML/CTF supervision (including crypto) and approved 154. The rejection numbers were up on previous years
- common non-compliance issues the supervisors found during monitoring included ineffective business-wide risk assessments, inadequate customer risk assessments, EDD that was not risk-sensitive and poor compliance monitoring. The Gambling Commission also found greater levels of inadequate policies and procedures, including CDD, as di the professional bodies; and
- total fines were only £41.5m (26m of which was levied by the FCA) as compared to nearly £300m in 2022-23, but this is often the case as the figure can change significantly where the FCA has taken action against a large institution. During the year, the FCA took 15 formal actions and 118 informal ones.